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Crypto mining can put local economies under pressure, says economist Matteo Benetton, one of the paper’s authors and a professor at the University of California’s Hass School of Business in Berkeley. In locations with fixed electricity supplies, operations absorb grid capacity and potentially lead to shortages of supply, rationing and power outages. Mining, even in places with wide access to electricity, such as outside of New York state, could leave out other potential industries that may have employed more people. “While there are private benefits through the electricity market, there are social costs,” says Benetton.
These effects are now felt across the country. Benetton says there are strong profit incentives to keep as many servers running as possible and is now demanding greater transparency in these companies’ energy use. This is not a popular opinion in the industry. But Benetton says, “If you’re doing really well, you shouldn’t be afraid to expose data.”
The federal government does not currently monitor the energy consumption of cryptocurrency, but Gary Gensler, head of the Securities and Exchange Commission, acknowledges that there are loopholes in the regulations. In a speech at the Aspen Security Forum in 2021, he referred to the industry as the “Wild West”.
Read warns that as long as mining is this profitable, crypto bans are shifting the damage to new places. when is china Crypto mining banned in 2021 To meet carbon reduction targets, operations have increased in places like Kazakhstan, where electricity comes mainly from coal. As a result, a recently to work Bitcoin’s renewable energy use has nearly halved between 2020 and 2021, falling to 25%.
Even when the industry invests in renewable energy, its sheer consumption makes it a significant contributor to carbon emissions.
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Read rejects promises that green investments or greater efficiency can solve this problem. A recent study report found that cryptocurrency’s energy use will increase by another 30% by the end of the decade, producing an additional 32.5 million metric tons of carbon dioxide per year. He says that as the price of Bitcoin rises, the rewards for mining incentivizing energy use increase. He refers to this situation as the “Bitcoin Dilemma”.
These 32 million metric tons of carbon dioxide will make the climate crisis worse, whether the emissions come from New York or Kazakhstan. “We all suffer as a result,” Read says.
Lois Parshley is an investigative science journalist..
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